Cold-hearted Costco

As the holidays approach, food drives and other hunger-relief efforts seem to be everywhere ... except your local Costco. Although this retailer is the current darling of the “socially responsible” financial set and has been praised by President Obama and patronized by Vice President Biden, a closer look at Costco’s record in helping the hungry shows it to be more Scrooge than saint.

In an email, Arthur D. Jackson Jr., Costco’s vice president of general administration, said the company would not likely have a food drive at any of its locations. “There are just too many worthy causes that would love to have that access, we would never be able to accommodate them all. Once we allow one we’d be hard pressed to deny it to others,” he said.

But what happens to all the food in stores that isn’t purchased before its sell-by date? Most large retailers, including BJ’s Wholesale and Sam’s Club, Costco’s direct competitors, have robust programs for collecting and donating products to food banks and soup kitchens. But not Costco. It composts that food and sells it for use as fertilizer and livestock feed. Just how much food does Costco dispose of in this way? According to figures in Costco’s own 2009 Sustainability Report, each Costco location produces an average of 3.7 tons of food waste each week. The number of Costco locations in the U.S. is 448 and growing. That means each year Costco composts or throws away more than 172 million pounds of food, about 7 pounds for each of its more than 25 million U.S. members.

So why doesn’t Costco donate this food to some of the “many worthy causes” mentioned by Mr. Jackson? After all, the same economies of scale in selling only large-sized packages of food that help make Costco so profitable would also apply to food donations. The answer, unfortunately, appears to be profit. Donating food would require Costco to pay employees to sort the food, and somebody would have to bear the cost of transporting it to hunger-relief agencies. It’s apparently more profitable for Costco to sell the food for pig slop than give it to hungry people.

Costco derives most of its profits from the annual membership fee it charges. And Costco is not reticent about taking from the communities where it operates, such as the $4 million subsidy Montgomery County taxpayers gave to help bring a new Costco to Wheaton. When Costco solicits you for a membership, ask why Costco doesn’t do more for hungry people.